Getting a company restructuring right requires a lot of knowledge and skill. Why exactly is it useful to call on external expertise? Katrien Decroos, Senior Communication Expert at Square Circle, asked Jo De Cock, currently Head of HR Western Europe at H.Essers. At two other companies, she coordinated a reorganisation with the guidance of Square Circle.
Katrien: Why did you find it necessary to engage Square Circle?
Jo: “I have experienced two reorganisations in recent years: a closure with collective redundancies where the Renault Act applied, and another case where several people were made redundant for economic reasons but there was no collective redundancy in the legal sense of the word. In both cases, we realised we needed external help in terms of communication and mapping out all the stakeholders and the actions you take towards them. As a team, you’ve been working on it behind the scenes for a while and then some things seem obvious, while to the employees or the outside world it might not be. That’s when you need someone to hold up a mirror to you and help you take a few steps back and revisit your story. And that’s how I ended up at Square Circle.”
What was the biggest challenge?
“The main question was: how do we best articulate this, taking into account the feelings of each person involved? And: ‘how do you bring a valid story to the press with a balance between the business and human side of the story‘?
After all, your story must make sense on all sides. Because what do people read in the newspaper? X number of jobs are disappearing, nothing more. In the media, the human part of the story is often underexposed. It is important to have that story co-written by someone who has not lived through the whole preparation phase and looks at it with a new perspective.
In the last case, Square Circle also helped to draft a letter to all employees appropriately: on the one hand, explaining why the company is taking such a decision and, on the other, stating that you sincerely realise that this is tough for the employees involved and their families.
In addition, the practical script and roadmap that Square Circle prepares are also incredibly valuable, in addition to the compact but very insightful training for executives.”
How did this roadmap help you?
“It helps to bring structure to the process. The Square Circle team consist of communication professionals and at the same time they know the legislation well and what steps to take.
The existence of such a roadmap that indicates from day to day and sometimes even hour to hour what actions you take to each stakeholder gives you a good grip on things as it can be quite hectic when you are in the midstof a difficult announcement and the weeks that follow. Square Circle has guided such crisis situations very often.
There were actions we didn’t think of, but which they pointed out to us based on their experience. The roadmap structures the communication and legal process in a very good way…”
Can you outline how stressful such a company reorganisation can be?
“An intention to close a part of the business and collectively dismiss employees is never announced lightly. The weeks before are therefore quite intense. The day of the announcement itself certainly causes stress: for the first time, you confront employees with an intention that will have dire consequences for them if the intention is confirmed. The realisation that a lot of employees may lose their jobs then comes in sharply. Even in those difficult circumstances, you want to handle things with the utmost respect for the staff. Square Circle has helped us here as well: ensuring that the whole process is done with the right empathy. You must be able to focus on people, which is not always obvious when you are in the middle of a process that also has very strict legal rules.
The role of the press is often problematic in reorganisations. How did that work out for you?
“Both HR and a few top management members have received training from Square Circle on how to deal with the press. That helps to stay in your own story and not get caught up in their questions. I would recommend such a training to anyone. It prepares you to make your own point in the very short time a journalist allows you and show the human side of the story.
How did the HR department experience Square Circle’s help?
“As an HR department, when there is a collective redundancy, you are very busy dealing with the unions, the information and consultation procedure and afterwards negotiating a social plan. Of course, an announcement that there is an intention to make collective redundancies affects all employees in a company. Managers are often as surprised as employees. Their employees then look to them for support and seek reassurance and clarity. The Square Circle training ‘Communication in Uncertain Times’ gave them a very good framework to handle this. It gave them insights into how people react to such news and how to deal with it as a manager. I received very positive feedback from the managers about training. It is valuable that the direct managers also have someone outside HR to take them by the hand for a moment and say: look, this is how you can make it a little easier for your people.”
More insights? Register here to our webinar ‘The do’s and don’ts of a successful communication’ on Tuesday 7 March 2023 or subscribe to our Newsletter and you will soon receive our E-book on this topic.
A crisis is always the ultimate test to expose the true soul of a company.
Salmonella contamination occurs frequently in Belgium but the majority never makes the news. Very occasionally a message appears in the newspaper to announce a recall. Not so with Ferrero.
The core of crisis communication: VALUES!
The key component of any crisis communication is to show the company’s attitude toward a society value that is compromised by the crisis. In this case, the health of consumers and more specifically of the children who were victims of the Salmonella contamination. In our crisis masterclass and media training, we teach our clients to focus their communications on these values from the very first minute.
Safety and health are general values that apply to all human activities. The protection of families as the cornerstone of society is also at the top as well as ethical conduct and the protection of the environment with attention to the climate. These values are universal, so to speak. Further values are the right of consumers to get adequate products and services and to be properly informed about them. The protection of the weak and the right to work are also part of the series. This is very topical, for example, within the immigration theme. Quality of life has risen sharply in recent years as a value, including the search for balance between private and professional life. Culture is also a value, and specifically local culture. Local norms and customs that determine how communities interact.
A few weeks after Ferrero, salmonella also struck chocolate manufacturer Barry Callebaut. The company reacted decisively, leaving no doubt about its approach to protecting consumers with a clear communication. A company can emerge positively from a crisis if it cares about these social values and acts accordingly. In the case of Ferrero, all we heard was the deafening noise of silence. The perfect storm that could have been avoided.
She is there, everywhere, at all times. She affects your private and professional life.
She is little known and little contested. Yet she consumes a lot of energy.
Her name? ENTROPY.
Entropy is a natural and irreversible phenomenon. The energy initially present in a system is transformed and ‘goes away’.
Entropy comes to us from physics but it is also perfectly visible in business.
To keep it simple: what is structured becomes de-structured, what is organized becomes disorganized, what is conceived becomes forgotten, continuously and naturally.
No one escapes this.
How do we fight against entropy? A few examples.
➡️ You want to encourage feedback in your team? Systematically put the topic on the agenda of your team meetings.
➡️ You want to reduce the number of accidents at work? After safety trainings, ask your employees to regularly review the situation on the floor in person with colleagues.
➡️ Are you starting a project? Consider “new blood” from the beginning if the project is going to be long and build up the “reserves” in the project team in time.
Fighting against entropy is within everyone’s reach.
1️⃣ Accept that it is universal and inescapable.
2️⃣ Make your colleagues aware of its existence.
3️⃣ You will be attentive to its effects on those around you and on yourself.
The Square Circle team guides people and organizations in growth, development and transformation. Supporting business dynamics is one of our great passions.
The beneficial effect of professional communication in any organizational restructuring, and especially when there are mass redundancies involved, is now widely recognized, backed up by facts and figures. The effect operates at a number of levels.
1. Being in control of the project right from the beginning and keeping control throughout the process
There is a saying: “If you want peace, prepare for war.” Preparing for a corporate restructuring must avoid all amateurishness and ensure the inclusion of all the target groups on which the firm depends. Specific preparation must be made to back up the internal announcement, handle the press and other mass media, and manage external communication.
Crisis scenarios will have to be studied in advance and borne in mind when formulating a crisis plan. There must be provision to train people in handling the media and uncertainty. All of this will have to be included in specific arrangements for organization and planning. A professional approach to communication will give the firm a significantly greater chance of succeeding in its plan.
2. Ensuring the senior managers’ credibility and protecting the firm’s reputation when dealing with the media in difficult circumstances, while also retaining trust among customers, banks, strategic suppliers, governmental authorities, etc.
At times of corporate restructuring, the press and other media primarily focus on the attitude the firm adopts towards the staff, rather than looking at the basic problem. A journalist knows that a firm’s announcement of an “intention” actually means that it is determined, and that nothing will prevent it from carrying out the plan! On the other hand, all eyes will be on the firm’s attitude towards industrial-relations problems. Specific training in handling the media will make it possible to frame messages that correspond with the media’s values while meeting the firm’s aims. The same is true in relation to customers, banks, important suppliers and the authorities. A proactive and personalized approach will make all the difference in terms of trust in the firm and the firm’s reputation.
3. In case of a collective dismissal, avoiding trade unions or staff members resorting to legal proceedings for failure to comply with Belgium’s Loi Renault, with the risk of financial and other penalties being imposed
Every word is important when there is an intention to close or restructure a firm, as it may be used against the organization. A professional approach to communication will ensure that the messages communicated both internally and externally comply scrupulously with the law. This must apply not only to documents but also in orally communicated messages from managers. Those in charge of communication must, for this purpose, have a good knowledge of what is implied by the Loi Renault and also have wide experience enabling them to brief senior and other managers. Bringing a professional approach to bear in communication should avoid legal appeals being made, based on shortcomings or communication errors at any stage.
4. Avoiding the dissemination of incorrect information that can produce conflicts
A basic rule for success in communication is being proactive. Being the first to disseminate a message is definitely an advantage over the trade unions. It is not enough, however. The announcement of a corporate restructuring must be framed according to certain communication principles if it is to be persuasive throughout the firm. Expressing the “business case” for a restructuring in terms that are clear and comprehensible to everyone is a job in itself.
It has been shown that clear and proactive communication avoids giving trade unions an opportunity to sow doubt, and makes it possible to avoid “emotional” types of industrial action.
5. Ensuring the plan’s credibility and that its effect is beneficial for the future, with no loss of the employees who hold the key to the firm’s successful relaunch
In any restructuring, two types of message have to be communicated: messages for those who may leave the firm and, even more importantly, messages for those who will remain and on whom the firm will depend for making the relaunch or plans for change a success.
This is a delicate exercise. Achieving the right balance depends on numerous factors. Control over these is important, so as to avoid losing key employees and prepare for a successful relaunch.
6. Avoiding or limiting industrial-relations conflicts, and managing crises, while keeping the firm as fully operational as possible
Avoiding and managing industrial-relations crises are a job in its own right within the communication field. Keeping the firm operational in particularly volatile or emotional circumstances is not something where you can ad lib. In either case, expertise in managing human behavior and change is essential, as is solid experience of managing industrial-relations crises. This experience has to be communicated to the managers (through general training and specific briefing) to assist in controlling difficult situations that can arise in everyday dealings with the staff.
7. Managing the situation when negotiations have reached a stalemate
Often, a stalemate can be overcome by a thoroughly convincing communication initiative to the staff, sometimes backed up by the media. Examples have occurred where staff representatives have refused to participate in the works-council meeting where an announcement was to be made. Other cases have been where there was a ballot to accept an industrial-relations plan, etc. There is no shortage of instruments, but what really matters is to develop a winning strategy, based on extensive experience of the field.
8. Training and supporting the supervisory staff in their communication activities aimed at changing opinions, accepting that the information and consultation phase is over, and ensuring the business continues
Middle management is a fundamental link in communication with the grass roots. People now stress that 80% of the messages communicated by a firm have to go through the supervisory staff, with only 20% being amenable to management from the center. This is especially true for middle managers, who often find themselves very much alone when dealing with a restructuring plan and staff reactions and questions. It has been noted that appropriate training in change-related communication and frequent back-up in the form of arguments or questions & answers are really helpful for these managers. The positive influence on grass roots’ opinions and on continuing business is widely recognized.
9. Managing the post-restructuring relaunch in order to achieve the plan’s aims
During a restructuring, a lot of energy is expended and resources deployed in the communication of the project and the management of the different steps of the process. This often creates a specific dynamic in terms of communication channels that should be kept open and alive after the restructuring. This contributes a lot to remobilizing the employees around the company project in order to provide the impetus needed to remotivate the staff and achieve the firm’s plan.
Unleash your company’s hidden performance
Stimulate recovery today.
After months of difficult containment and despite alarming and often alarmist forecasts, most Belgian companies are not ‘at the end of their rope’. But let’s be clear: the critical phase is coming now. In most cases it will be necessary to reorganize structures in order to control costs. But that will not be enough.
Tomorrow’s ‘winning’ companies must also look to the medium and long term. Transforming a company is of little use if it continues to be managed with pre-crisis concepts. One example: the freedom gained by employees through ‘forced’ teleworking will not disappear when the situation returns to normal. The classic hierarchy concept will be overturned.
It is therefore time to thoroughly rethink not only your structures and ways of working, but also your ways of functioning and internal cooperation, in parallel with everything you are currently doing to return to normal.
And to help you achieve this transformation, did you know that your company has a hidden source of economic and human resources? A real reservoir of performance that can be perfectly mobilized right now to activate the economic recovery and get out of the crisis?
Mobilizing hidden performance: within the reach of any company
Let’s start with an obvious fact…often forgotten in recent years. The level of performance of your organization is strongly linked to its ability to maintain sustainable cooperation between employees, teams, hierarchical levels, operational and functional units.
By interacting correctly, the ‘human’ organization develops and sells the products and services that keep it alive. But as nothing is perfect in this changing world, some of the interactions cause problems that need to be ‘regulated’. This regulation generates waste of time, energy, financial and human resources that it would be smarter to use to help your organization to (re)develop.
These losses of energy, human and financial resources are manifold. We will give a few examples, but check at the end of the article how your company fits into a more exhaustive list:
– Destruction of added value resulting from poor synchronization of activities
– Financial overloads caused by problematic operational implementation
– Overtime pay caused by shifts in functions due to a lack of delegation
– Time and resources consumed in the regulation of repetitive or predictable problems
– Over-consumption of resources due to a lack of steering of activities
– Losses in production and quality caused by a low level of responsibility of operators
– Implementation of change projects that are top slow, over budget or not meeting objectives because the strategy has not been cascaded throughout the company
More than 4,000 ‘dysfunctions’ of this type have been identified over 45 years of management research in companies and public organizations. They are also called hidden costs because they do not appear in balance sheets or management tools. However, they do have an impact on the final result.
These dysfunctions create losses of energy and means, but also create frustration and human disengagement. They undermine a company’s energy and strike force. Their economic impact has been calculated in several thousand companies. This real ‘source of additional performance’ fluctuates between €25,000 and €60,000 per worker per year, on a recurring basis.
Let’s take an example: a company with 100 employees has an additional source of economic performance at its fingertips, which is between €2.5 and €6 million per year. Amounts that could be used to finance digitalization, strengthen structures, improve competitiveness, invest in innovation, training, increase the investments necessary for successful transformation, support profitability.
So what are we waiting for to exploit it?
An approach exists. It places people at the centre of economic performance.
While models such as Lean Manufacturing, Six Sigma and Kaizen have been able to contribute to the optimisation of certain processes, they no longer meet the new needs generated by the impact of the pandemic on mentalities, behaviours, working methods and the new challenges taken up in a very large number of markets.
The future belongs to companies that have truly integrated human and economic factors into their DNA. Such an approach exists: it is called ‘socio-economic’.
This managerial approach applies itself to supporting growth by also continuously developing all the hidden sources of performance. The additional resources released by this approach are used to strengthen competitiveness, turnover, the quality of products and services, innovation, growth, the attractiveness of work… according to the strategic priorities of each company.
Why deprive ourselves of additional sources of performance that are just waiting to be exploited to get out of the crisis?
Experience shows that up to 55% of the hidden sources of performance that all companies, whatever their size or activity, can recover annually. Provided that the elements that give rise to them are clearly identified, precisely calculated, analysed for their root cause and ‘recycled’ into performance by means of a structured management method that mobilises all the company’s stakeholders.
A socio-economic approach gives management, supervisors and employees the means and tools to effectively manage the company’s resources in their own area of responsibility. Man is no longer considered as a cog in a big machine that needs to be ‘oiled’ periodically, but as a co-producer of added value and a self-controller of his own management by dealing with malfunctions in a way that is shared by all and in close consultation with his colleagues and superiors.
This approach is neither a democracy nor a concept of self-management. On the contrary, it brings management back to its essential mission: to look after the employees so that they can look after the machines, the internal and external customers. In other words, it puts into practice the fact that in a company we are all ‘salesmen’ or ‘producers’.
A self-financed approach,
It is therefore in your company’s best interest to mobilise its hidden performance potential to reconnect with customers and markets, improve its competitiveness, its attractiveness to employees, its commercial strike force, its ability to innovate and to face the competition in full possession of its resources.
The socio-economic approach is entirely self-financed. The economic gains obtained in the very short term largely finance the relatively light investments in the training of management and the piloting of the method. Experience shows that self-financing is achieved on average over a period of 6 to 8 months, and very often over a much shorter period.
With this self-financed approach, a successful exit from the crisis on a budgetary level is within the reach of every company. Take the step! Join the thousands of companies that have already integrated this approach into their growth and development strategy. Hidden human and economic resources are at your fingertips.
Implementation of socio-economic management.
The approach can be started as a pilot project in one or more departments or as a strategic project for a site, a factory, a company as a whole. It offers great flexibility in its implementation.
The first step in its implementation is therefore to define the scope of its application. This step allows management to concretise precise expectations, expected progress and to define the scope of intervention, which can be sequenced over time.
Second stage: start of training/concertation of management and supervisory staff on the socio-economic management method and tools.
At the same time, conducting a horizontal diagnosis and vertical diagnostics to highlight the sources generating hidden costs, monitoring groups of projects and the implementation of actions to transform them into economic and social performance.
Six areas are covered: working conditions, work organization, time management, communication-coordination-concertation, integrated training and strategic implementation.
A specific and unique software program allows to classify the sources of hidden costs by domain and reveals the convergences or divergences of opinion between management and management.
An expert’s opinion is issued together with a proposal for dealing with malfunctions by ‘baskets’.
The dysfunctions are then dealt with through project groups and priority action plans over 6 months, mobilising workers at all levels of the company.
The method allows each employee to continuously assess the progress achieved and ensures that socio-economic know-how is passed on throughout the organization, in order to achieve sustainable results.
The first concrete results can be expected within the first 2 to 3 months, sometimes even earlier.
Most of the companies that have adopted socio-economic management have gradually integrated it into all their structures, creating a real continuous dynamic of human and economic progress.
Does your company also encounter this type of problem? They form a hidden source of performance ready to be mobilised!
A non-exhaustive list, to date, over 45 years of research, approximately 4000 dysfunctions have been identified.
- Poor consultation and coordination between people, teams and departments: maintenance of ‘silos’, loss of flexibility, cumbersome decision-making processes, additional costs of strategic implementation.
- Unsuitable working conditions: impact on concentration, motivation, productivity and the quality of the work performed, additional cost of operational implementation.
- Deficient communication: partial information and lack of feedback to steer change, insufficient valorisation of the skills potential present in the company, fixed corporate culture, strong resistance to change.
- Weak management of working time: recurrent loss of time leading to overtime, multiple and unmanaged meetings, loss of quality in decisions, loss of time and efficiency in strategic implementation.
- Fragmentation of working time: frequent interruptions due to inefficient work organization, chronic emergency work with impact on the quality of work, services, products, loss of productivity, cost of overtime.
- Deficient or uncoordinated programming of activities: additional cost due to loss of time and energy, over-consumption of financial and human resources.
- High staff turnover: loss of efficiency, additional recruitment costs, negative impact on the implementation of change and strategy.
- High absenteeism: additional cost of temporary staff.
- Lack of versatility in teams: failure to adapt teams to new and future needs, cumbersome and over-costing strategic implementation.
- Insufficient, poorly adapted or poorly used programming and monitoring tools: lack of ‘steering’ of teams due to the lack of suitable indicators.
- Non-integrated training: difficulties in developing skills, additional cost of training that is not adapted to the needs of the company.
- Poor implementation of the strategy: failure to disseminate the strategy at all levels, failure to achieve the required transformations and the company’s objectives, chronic underperformance of management and staff in implementing the strategy and making changes.
These dysfunctions have two types of impact:
Economic impact: lower productivity, quality problems, loss of competitiveness, higher financing costs, reduced capacity for innovation, poor strategic implementation, increased costs, failure to achieve economic and financial objectives.
Social impact: Insufficient mobilisation of human potential to achieve change and goals, corporate culture frozen by strong resistance to change, lack of staff flexibility, under-utilisation of talents and skills, increased absenteeism and staff turnover, increased costs of strategic implementation.